A: You can earn up to €12,000 a year tax free, by renting a room in your principal residence. This is referred to as Rent- A - Room Relief. Unfortunately Revenue have recently released updated guidance for this relief, which specifically excludes the provision of accommodation to occasional visitors for short periods. In this case, the visitors are using the lodging as guest accommodation rather than for residential purposes.
What this means for you is that the rental income you have earned will be taxable. If you are a high income earner the potential tax charge could be approximately 52%. You will however be entitled to claim direct costs against this, such as accountancy fees incurred for preparation of your tax return.
If you are thinking of a starting to rent or have already rented a room in your house, you should contact an accountant as soon as possible for advice.
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.